In the world of Consumer Packaged Goods (CPG), demand planning is crucial. Get it right, and you’ve got happy customers and a strong bottom line. Get it wrong, and you’re stuck with excess stock or scrambling to meet demand.
Here’s how to sharpen your demand planning skills and keep your supply chain running smoothly:
Learn from the Past
- Your sales history is a treasure trove. Look for patterns, but don’t stop at numbers. Understand the context—was there a promotion? A supply hiccup? Dive into the details.
- Pro Tip: Don’t just track sales. Consider seasonality, pricing, and even weather. Experiment with these variables to optimize future demand.
Stay Market-Savvy
- The market is a wild ride. Keep tabs on:
- Consumer trends: What’s trending?
- Economic shifts: How’s spending?
- Competitor moves: What’s the competition doing?
- Regulations: Any new rules on the horizon?
- Factor these into your plans to anticipate demand shifts.
Collaborate Like a Pro
- Demand planning isn’t solo work. Bring in:
- Sales: They know the customers.
- Marketing: What campaigns are in the works?
- Finance: How do forecasts fit with budgets?
- Operations: What are the production limits?
- Regular meetings and shared platforms can turn insights into actionable forecasts.
Use Tech Wisely
- Demand planning tools are powerful but remember—they’re just tools.
- Use them to:
- Automate tasks
- Run complex scenarios
- Integrate diverse data
- But always apply human judgment to the results. Trust your experience.
Segment for Success
- Not all products are equal. Segment by:
- Sales volume
- Profitability
- Demand volatility
- Lifecycle stage
- Focus advanced forecasting on high-impact items, and keep it simple for the rest.
Prepare for Surprises
- CPG is full of surprises. Build flexibility:
- Use safety stock strategically
- Have contingency plans ready
- Create multiple scenarios (best, worst, and most likely)
- This ensures you’re ready when the unexpected happens.
Measure and Improve
- Track key metrics like forecast accuracy and bias.
- Regularly review:
- What worked?
- What didn’t?
- What can be improved?
- Use these lessons to refine your process continuously.
Keep the Human Element
- Data is powerful, but human insight is irreplaceable.
- Encourage your team to:
- Challenge assumptions
- Spot anomalies
- Trust their gut—sometimes experience sees what data misses.
Take Action
Demand planning in CPG is a mix of art and science. By learning from the past, staying market-aware, fostering collaboration, and continually improving, you can boost your forecasting accuracy.
Remember, it’s about progress, not perfection. Even small gains can make a big difference.
At Demand Planner Pro, we help CPG companies fine-tune their demand planning. Whether you need an overhaul or just a fresh perspective, we’re here to help.
Ready to level up your demand planning? Contact us today to explore how these strategies can work for your business.